Cisco Systems - Acquisitions

Acquisitions

Cisco acquired a variety of companies to spin products and talent into the company. In 1995–1996 the company completed 11 acquisitions. Several acquisitions, such as Stratacom, were the biggest deals in the industry when they occurred. During the Internet boom in 1999, the company acquired Cerent Corporation, a start-up company located in Petaluma, California, for about US$7 billion. It was the most expensive acquisition made by Cisco to date, and only the acquisition of Scientific Atlanta has been larger. Several acquired companies have grown into $1Bn+ business units for Cisco, including LAN switching, Enterprise Voice over Internet Protocol (VOIP) platform Webex, and home networking. The latter came as result of Cisco acquiring Linksys in 2003 and in 2010 was supplemented with new product line dubbed Cisco Valet. Cisco announced on March 15, 2012 that it is acquiring NDS Group for a $5B. This transaction was expected to complete in 4–6 months.

In the recent merger deals, Cisco bought Starent Networks (a mobile technology company) and Moto Development Group, a product design consulting firm that helped develop Cisco's Flip video camera. Also in 2010, Cisco became a key stakeholder in e-Skills Week. In March 2011, Cisco completed the acquisition of privately held network configuration and change management solutions company Pari Networks.

Although many buy-ins (such as Crescendo Networks in 1993, Tandberg in 2010) resulted in acquisition of flagship technology to Cisco, many others have failed – partially or completely. For instance, in 2010 Cisco occupied a meaningful share of the packet-optical market, revenues were still not on par with US$7 billion price tag paid in 1999 for Cerent. Some of acquired technologies (such as Flip from Pure Digital) saw their product lines terminated.